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Clinical Resource Management Series — Part 3 of 10
Utilization Review and Denial Management
Part 3 in our Clinical Resource
Management (CRM) series is focused
on utilization review and denial management.
Although we are writing this newsletter specifically for
the utilization review function—as illustrated in the
diagram to the right—all of the CRM functions must
work together to have a successful program.
We hope you will find the information
helpful as you develop and/or
strengthen your program.
September 2014
Utilization Review
In the hospital setting, Utilization Review
provides both a review function as well as a
support function for the provider and other staff
related to the admission decision, continued
stay and resource utilization.
Utilization Review is responsible for delivering
Advance Beneficiary Notices (ABNs),
interfacing with third party payors regarding
author i zat ions and del iver ing the
Important Message from Medicare (IM)
regarding discharge rights to Medicare
patients.
The goal is to achieve appropriate
reimbursement & prevent denials from
Medicare and other third party payors.
Denial Management
Denial management is another important
component of Utilization Review.
Although denials may be received by the
business office, utilization review staff should
always be involved with reviewing the denial.
A potential exception is for denials that occur
because incorrect codes or information was
transmitted. UR staff provide critical input in
writing appeals as well as helping to identify
strategies to prevent future denials.
| page 2
September 2014 September 2014
Regulatory
Requirements
Regulatory requirements for review of medical
necessity and utilization can be found in both
Appendix A (PPS Hospitals) and Appendix W
(Critical Access Hospitals).
PPS Hospitals
Let’s talk about PPS Hospitals first. The State Op-
erations Manual Appendix A, published 03-21-14,
includes requirements for the utilization review
functions in §482.30 as summarized below.
Utilization Review Plan: The Hospital must
have a UR plan that provides for the review of
services furnished by the institution and by
members of the medical staff to patients enti-
tled to benefits under the Medicare and
Medicaid programs. The interpretative guide-
lines require that the UR plan include delinea-
tion of the responsibilities and authority for
those involved, establishment of procedures
for the review of the medical necessity of ad-
missions, the appropriateness of the setting,
the medical necessity of extended stays, and
the medical necessity of professional services.
Utilization Review Committee: The Commit-
tee must include two or more practitioners.
At least two of the members of the commit-
tee must be doctors of medicine or osteopa-
thy. The other members may be any of the
other types of practitioners specified in
§482.12(c)(1).
Concurrent Medical Necessity Review: Re-
views must occur for Medicare and Medicaid
patients with respect to the medical necessity
of--
i) Admissions to the institution;
ii) The duration of stays;
iii) Professional services furnished including
drugs and biologicals.
Although the regulations state that reviews
may be performed before, at, or after hospi-
tal admission—organizations almost always
perform the reviews during the admission as a
strategy to prevent denials.
Physician Review: One or two physician
members of the UR Committee are responsi-
ble for determining if an admission or contin-
ued stay is not medically necessary. This in-
cludes any change from inpatient to observa-
tion (Code 44).
Outlier Review: Hospitals are required to con-
duct reviews of any cases that they reasona-
bly assume to be outlier cases based on
length of stay or high costs. You may choose
to use the Medicare definition of an outlier—
but most facilities set the thresh-hold lower to
ensure more timely review.
| page 3
September 2014 September 2014
Regulatory
Requirements
Critical Access Hospital (CAH)
State Operations Manual Appendix W, published
04-11-14, are not overly specific in relationship to
utilization review functions. However, they do re-
quire that CAHs have an, “Effective quality assur-
ance program to evaluate the quality and ap-
propriateness of the diagnosis and treatment fur-
nished in the CAH and of the treatment out-
comes”. §485.641(b)
Utilization of the PPS Hospital requirements as out-
lined on the previous page will help the CAH to
develop and sustain a viable UR program. Com-
ponents should include:
Utilization Review Plan
Active Utilization Review Committee with two
physician members (You may designate one
or both as UR Physician Advisors)
Concurrent Medical Necessity Reviews
Medical Necessity Physician Review
Outlier Review
Other Regulatory Requirements
Both CAHs and PPS hospitals are subject to the
same rules for determining patient status and bill-
ing for Medicare and Medicaid, although the
reimbursement mechanisms may be different.
The Medicare Claims Processing Manual and the
Medicare Benefit Policy Manual both provide im-
portant information. There are also periodic up-
dates from CMS that are published in MLN Mat-
ters or as CMS transmittals. And of course—the
Federal Register is the first source for changes. It
is extremely important that UR staff are knowl-
edgeable and current with all of the require-
ments. If you haven’t done so —- sign up to
receive updates on the CMS web site. At a mini-
mum, UR staff should be aware of the most cur-
rent rules and regulations related to:
2-Midnight Inpatient Presumption
96 hour LOS (CAH only)
Observation including Observation after out-
patient surgery
Swing Bed including 3-day qualifying stay and
criteria for swing bed admission
Important Message from Medicare
Advance Beneficiary Notices
Medical Necessity Guidelines
A word about medical necessity guidelines. As
you know the two most common are Interqual
and Milliman Care Guidelines (mcg). Most or-
ganizations today, use one or the other to help
review cases for medical necessity, utilization of
resources and length of stay.
Although the use of guidelines can be very help-
ful, It is extremely important to remember that
CMS has made it very clear that only the
provider can determine status based on the se-
verity of the patient’s signs and symptoms and
the medical predictability of something adverse
happening to the patient. If you question the
provider’s decision making—that’s the time to
call your UR physician advisor.
Medicare Benefit Policy Manual Chapter 1—06-27-14
“However, the decision to admit a patient is a complex
medical judgment which can be made only after the physi-
cian has considered a number of factors, including the pa-
tient's medical history and current medical needs, the types
of facilities available to inpatients and to outpatients, the
hospital's by-laws and admissions policies, and the relative
appropriateness of treatment in each setting.”
| page 4
September 2014 September 2014
Point of Entry
Utilization Review staff play a very important
role in reviewing and discussing admission deci-
sions with providers. This includes ensuring that
there is a clear order for the type of admission
(inpatient, outpatient, observation), that docu-
mentation clearly supports the admission deci-
sion and orders for treatment support both the
type of admission and medical necessity.
Review at the point of entry is even more criti-
cal than in the past with the advent of the
recent CMS rules requiring physician certifica-
tion for inpatients and that patients will be dis-
charged or transferred within 96 hours in Criti-
cal Access Hospitals.
Of course, saying that support at the point of
entry is critical—is fine—but in a rural facility
with limited resources, how does that occur?
Some common strategies you may want to
consider are outlined below.
1. Order Sets: Develop order sets that include
certification requirements—and definitions.
Most facilities that I have visited recently al-
ready have this in place! This helps queue
providers as well as other staff as to what is
needed regarding documentation.
2. Resources: Provide tip sheets or other sim-
ple to read information for Emergency De-
partment providers and Hospitalist. Include
information about your most common types
of admissions.
3. Planned or Elective Admissions: Develop a
process for review by UR staff, if possible,
before the admitting order is written. Alt-
hough this may not be possible for all
admissions, try to catch those that may
have been problematic in the past relative
to lack of documentation and/or denials.
4. Hours: Stagger UR staff to cover more
hours, including evenings. This may seem to
be a costly solution—but—depending on
your history of denials and the cost of deni-
als, it may be money well spent.
4. On-Call: As an alternative to extending
hours, consider placing UR staff on-call with
the expectation that they are notified for all
non-emergency admissions. Some facilities
are using technology solutions, such as
smart-phones, to facilitate this process.
6. Cross-Training: Cross-train a limited number
of other staff, such as house-
supervisors, to support physicians
when UR staff is not present. If
the house-supervisor is the indi-
vidual in your organization that
receives requests for bed placement—they
are the ideal individual to also review the
documentation and admission status with
the provider.
7. ED Case Manager: Develop an ED Case
Manager role that can also help with UR
functions. Although great in concept—
unless you are large enough to have 24-
hour coverage in the ED, the UR functions
may still not be well covered.
| page 5
September 2014 September 2014
Daily Reviews
Daily reviews are critical to ensure that the pa-
tient and the documentation, including orders for
treatment, continue to support medical necessi-
ty. Remember—this is not just provider documen-
tation—but documentation of other disciplines as
well. Here are a few tips:
Go see the patient. The most important tip is,
“Go See The Patient”. The medical rec-
ord may paint a different picture than
the actual patient condition—and you
won’t know that unless you actually go
to the bedside.
Talk to the Provider: It is very important to ask
questions when discussing a specific case
with a provider—and not to challenge
medical decision making. Ask the pro-
vider to document their rationale for
admission or for keeping the patient in
the hospital. “The patient does not
meet criteria” - should never be in your
lexicon. And If you need support, talk
to the physician advisor and ask for their help.
Observation: The UR staff serve a very im-
portant function relative to monitoring pa-
tients that are placed in Observation includ-
ing:
Ensuring that orders are time-limited.
Ensuring that orders and documentation
include a clear cycle of assessment and
reassessment.
Advising the provider if an observation
patient may be appropriate for inpatient
admission if it appears that they will meet
the 2-midnight inpatient requirement. Re-
member hours in the ED and Observation
count.
Ideally observation patients are reviewed at
least twice per day and/or whenever a cycle
of assessment/reassessment has been com-
pleted. In many facilities, the UR staff is also
responsible for determining the number of
hours that are billed.
Multi-Disciplinary Planning
Provider Multi-disciplinary Rounds
Multi-disciplinary rounds
that include the provid-
er are an ideal method
of collaboration—and
ensuring that everyone
is on the same page. If
you have a hospitalist program, it should be rela-
tively easy to find a time that works for the pro-
vider and other disciplines.
Disciplines typically include, in addition to the
provider:
Utilization Review and Discharge Planning
Clinical Documentation Improvement (CDI)
and/or HIM
Social Services
RN responsible for patient
Pharmacist
Rehabilitation (PT/OT/Speech)
Dietitian
I was at one facility a couple of years ago that
had unlimited visiting hours including the ICU —-
except 30 minutes in the morning and 30 minutes
in the afternoon when they restricted visitors for
multi-disciplinary rounds. Good Idea!
Each patient should be discussed, with a focus
on the treatment plan, goals of treatment, ad-
herence to evidence-based care/guidelines, ex-
pected length of stay and the discharge plan.
AND —- because these are rounds that occur in
the patient room, the patient is an important
contributor to the discussion. If you use white
boards that shows key milestones—it’s an ideal
time to update the board.
| page 6
September 2014 September 2014
Multi-Disciplinary Planning cont.
Multi-Disciplinary Meetings: Many organizations
have a sit-down meeting on a daily basis to dis-
cuss each patient. We much prefer the option of
multi-disciplinary rounding. However, if you
choose to have a meeting, they must be well
structured or they become nothing more than a
nursing report—or a repeat of information that
everyone in the room already knows—and there-
fore provides little value.
Just like multi-disciplinary rounding focus on the
treatment plan, goals of treatment, adherence
to evidence-based care/guidelines, expected
length of stay and the discharge plan. Ensure
that someone has spoken to the patient prior to
the meeting and that you incorporate their input!
If you use white boards, be sure to assign some-
one to update after the meeting. And don’t for-
get to document the meeting, including at-
tendees, in the patient record.
Outliers or Complex Patients: Just a word of cau-
tion. DON’T try to discuss extreme-
ly complex patients as part of your
regularly scheduled meeting. Meetings to dis-
cuss complex patients should be scheduled at a
separate time and may include additional indi-
viduals such as the patient’s primary care provid-
er, physician specialists, Infection Preventionist,
Home Health, Long Term Care, CEO or CFO. At-
tendees will depend on the patient needs. You
may also want to consider including the patient
and/or family.
Third Party Payors UR staff is responsible for third party payor author-
izations. And no authorization
means no reimbursement.
Medicare, at least currently, does
not require pre-authorization for
services (although this is in the discussion stages).
Many third party payors require both initial au-
thorization as well as continued stay authoriza-
tions. This can take a significant amount of
time—as I’m sure you are aware.
Here’s some strategies to consider:
1. Negotiate with the payor to allow you to
complete admission and continued stay re-
views internally based on pre-approved
guidelines.
2. Send information and receive approvals elec-
tronically, again based on pre-approved
guidelines, so that you are spending less time
on the phone.
3. Negotiate the need for approval only if a pa-
tient exceeds pre-determined length of stay
or charge thresh-holds.
The ideal time to discuss these strategies are dur-
ing contract negotiation. Talk to the CFO or indi-
vidual responsible for negotiating contracts
about including some or all of these options in
the next contract negotiation.
Important Message from Medicare
Utilization Review is often responsible for either
delivering—or ensuring delivery of the Important
Message from Medicare (IM) for Medicare and
Medicare-eligible patients. Some organizations
have the admitting department provide the first
notice and UR is responsible for delivering the
second notice. Regardless of your process, it is
imperative that these notices are delivered within
the timelines defined by Medicare.
Some hospitals have adopted a strategy of deliv-
ering the IM on Friday to all Medicare patients
regardless of whether they are expected to be
discharged or not rather than relying on nursing.
This seems a little over-zealous, but each facility
will need to develop their own strategy to ensure
the IM is delivered. Pay special attention to your
process if the individual(s) usually responsible are
off sick and/or on vacation.
At a minimum, UR should track the timeliness of
delivery. Also make sure you have the most re-
cent IM which includes both the date and a time
the notice was signed. I am still finding IM’s that
do not include the time of delivery. Require-
ments and the most current form may be found
at CMS.gov.
| page 7
September 2014 September 2014
Physician Advisor(s)
Every UR Program should have an identified
physician advisor. This is usually one (or both) of
the physicians on the UR Committee. In some
organizations, the Chief-Of-Staff elect or other
medical staff officer is designated as the UR
Advisor. Although this can work well—there is a
learning curve for each physician who assumes
the role.
The following is a list of functions usually as-
signed to the physician advisor(s):
Chair or Co-Chair of UR Com-
mittee.
Conduct clinical reviews on
cases referred by UR staff and/or
other healthcare professionals.
Hold regular meetings with UR
staff to discuss selected cases and make
recommendations.
Interact with medical staff and medi-
cal directors of third party payors to
discuss the needs of patients and al-
ternative levels of care.
Act as consultant and resource to the
attending physician regarding appropri-
ateness of hospitalization, continued
stay , documentation and utilization of
resources.
Function as an expert resource to medi-
cal staff regarding federal and state reg-
ulations.
A job description should be developed with
specific accountabilities. This is especially criti-
cal if the UR Physician Advisor is a paid position.
Utilization Review Committee
The UR Committee serves an important pur-
pose in guiding the UR functions and perform-
ing record reviews.
The UR Committee is typically responsible for:
Ensuring that regulatory guidelines relat-
ed to UR have been implemented and
that monitors are developed to ensure
compliance, if appropriate.
Educating staff and providers regarding
the UR function and regulatory require-
ments.
Reviewing records when there is a ques-
tion about medical necessity or other uti-
lization issues.
Reviewing denials and appeals.
Reviewing data compiled by the UR staff.
(The next page includes a list of metrics
commonly collected and reviewed.)
Typical the UR Committee includes the follow-
ing—although membership can vary.
2 physicians
1—2 mid-level provider (especially im-
portant if mid-level providers admit
patients)
Utilization Review
Discharge Planning
Clinical Documentation Improvement
Specialist and/or HIM
Quality Director
CNO
CFO
| page 8
September 2014 September 2014
Metrics
Metrics measure the effectiveness of your UR program and show that you have a data-driven
program. The following are recommended metrics. Please note that these metrics are also
applicable to other aspects of your CRM program—not just UR.
Metrics Outliers
Number of Length of Stay outliers
(as defined by your organization)
Number of Cost outliers
(as defined by your organization)
Metrics—Discharge Delays
Avoidable (Discharge) Delays—Internal
Internal Examples
Therapy not available on weekends
Medical Imaging equipment not working
Lab delays
Consult delayed
Avoidable (Discharge) Delays External
External Examples
LTC bed not available
Transferring organization delayed transfer
Lack of Home Health
Late arrival of medical equipment
Family unable to pick up patient
Metrics—Denials
Denials by payor including MAC and RAC
Denied Days
Denied Charges
Reasons for denials
Metrics—Process Measures
Medical Necessity reviews completed
for each inpatient and observation patient daily
Number of referrals to UR Physician Advisor
Metrics—Patient Required Notices
Important Message from Medicare delivered within
timeframes required and signed, dated, timed
Number of ABNs delivered (including reason)
Metrics—Provider Attestation
CAH only
Number and % of patients without provider certification
in medical record that expected LOS is 96 hours or less
CAH only
Number and % of patients without provider
certification in medical record that expected LOS is
96 hours or less
CAH only
Number and & of patients that
exceeded 96 Hour Length of Stay
Provider documentation (attestation) at admission that
LOS is expected to be at least 2-midnights for inpatients
Metrics—Length of Stay
Average LOS inpatients (excluding swing)
Average LOS Medicare (excluding swing)
Average LOS by specific diagnosis
compared to GMLOS for most common diagnosis
Average LOS Swing bed
Swing Bed patients with
exactly a 3-day qualifying stay
Metrics—Medical Necessity / Documentation
Number of Medicare and Medicaid
inpatients that do not appear to meet medical
necessity as determined by UR staff. Include number
referred to UR Physician or UR Committee for review.
Number of Medicare and Medicaid
observation patients that do not appear to meet
medical necessity. Include number referred to
UR Physician or UR Committee for review.
Number of observation patients that do not show specif-
ic time limited orders or documentation of assessment
and reassessment
Number of outpatient surgery or outpatient procedure
patients placed in observation post-procedure
| page 9
September 2014 September 2014
So… What does an Excellent Utilization Review Program look like?
Experience has shown that there are a number of elements that must be in place, regardless
of the size of the organization, to establish a solid foundation for a successful Utilization Review
Program. Use the table below to evaluate your program!
Criteria for Success Yes No
Maybe—We’re
Getting There
1. Active, demonstrated support from hospital and medical staff
leadership.
2. Physicians respect and interact in a collegial manner.
3. Expectations are clearly defined for Individuals assigned to UR
functions, including UR Physician Advisor(s)
4. UR Physician Advisor is actively involved in UR processes.
5. Initial and ongoing orientation and education is in place for Uti-
lization Review staff, Physician Advisor(s) and UR Committee.
6. UR staff are knowledgeable regarding most recent regulations
applicable to UR—and have a process to stay current.
7. Utilization Review Plan is current (updated within 12 months).
8. Active Utilization Review Committee with at least 2 physicians.
9. Multi-disciplinary rounds and/or meetings are well-organized
and effective with clearly defined roles and responsibilities.
10. Multi-disciplinary rounds occur at least 3 times per week and
include the UR Physician advisor and/or Hospitalist.
11. UR staff are available 24-hours per day to review admissions
and provide support.
12. Order sets or other information has been developed to assist
with admitting status decisions and documentation — and are
available to physicians including ED physicians & Hospitalists.
13. UR staff participate actively in reviewing denials.
14. Metrics (data) is collected and reported at each UR Commit-
tee. Data is used to drive improvement.
| page 10
September 2014 September 2014
HealthTech hopes that the information contained herein will be informative and
helpful on industry topics. However, please note that this information is not
intended to be definitive. HealthTech and its affiliates expressly disclaim any and
all liability, whatsoever, for any such information and for any use made thereof.
Recipients of this information should consult original source materials and qualified
healthcare regulatory counsel for specific guidance in healthcare reimbursement
and regulatory matters.
If you have questions or comments - or would like an on-site review of your Clinical Resource Man-
agement program, please contact HTMS Regional Chief Clinical Officers:
Carolyn St.Charles Diane Bradley
360-584-9868 (office) 206-605-3748 (cell) 585-671-2212 (office) 585-455-3652 (cell)
[email protected] [email protected]
Stay tuned for the next newsletter in our
CRM series. And if you missed one—just
let us know and we will be glad to send
to you by E-Mail.
Happy Reading